Everyone might be in a flap, but worries about the US and Chinese economies are getting exaggerated, so don’t be surprised if cheap shares soon have buyers coming back.

The point where the correction creates serious new buying interest is not far away.

Sharemarket valuations became extended after the US Federal Reserve failed to follow up on its own signalling and begin its quantitative easing last September.

The taper did begin in December, and the second instalment came last week.

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Share prices around the world are adjusting to the taper, which reduces the amount of cheap cash in the system, albeit gradually.

The bottom line however is that Fed is cutting the size of its cash splash because it believes the US economy is strong enough to handle the contraction.

There is absolutely no doubt that the Fed will slow down the taper if it sees serious signs that America's recovery is faltering.

As share prices fall, earnings growth is becoming cheaper to buy.

The over-valuation that was built in after the Fed's false start with QE in September is being removed, and value is returning the sharemarkets, not just in the United States, but here in Australia.

The point where the correction creates serious new buying interest is not far away.

As for whether global economic growth it is faltering, as Evans and Partners chief investment officer Michael Hawkins told clients today, some of the commentary on soft economic data of late is verging on the comical.

The latest slide is blamed on weaker manufacturing data in China and the US, but the US is struggling through a severe winter that distorts the economic view, and the Chinese New Year is another data distortion.

Manufacturing indices in both countries are still positive, and a JP Morgan-Markits global manufacturing index was above the neutral level of 50 points at 52.9 in January, and virtually unchanged from a two and half year high of 53 in December.

That's a better pointer to the world's health than the nervous markets, and if shares fall much more buyers should return in force.